Red Sea crisis impact more than Covid on ocean freight rates

Photo by Rinson Chory on Unsplash
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In particular, Xeneta has released data which reveals shipping costs on key trades from the Far East to Europe spiked more than 200% in the first 52 days of the Red Sea crisis.

As explained, this outpaces the increase in rates seen during the first 52 days of the pandemic.

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The impact of the Red Sea crisis, while more immediate, is not expected to be as prolonged as the pandemic – and shippers are becoming increasingly impatient and suspicious of carriers seeking to keep rates elevated for as long as possible.

This is backed by a poll of hundreds of Xeneta customers, which revealed almost two thirds of shippers have been told their minimum quantity commitments (MQCs) are not being honored under existing contract agreements, with carriers pushing them onto the freight all kinds (FAK) market and higher rates.